VANCOUVER, March 17, 2014 /PRNewswire/ - Golden Queen Mining Co. Ltd. (TSX:GQM) (OTCQX:GQMNF) (the "Company") is pleased to announce its financial results for the twelve months ended December 31, 2013 and to provide an update on the construction underway on its Soledad Mountain Project (the "Project"). Amounts shown in U.S. dollars.
2013 Highlights
- The Company was accepted by the International Cyanide Management Institute as a signatory of the International Cyanide Management Code in May.
- The key highlight for 2013 was the start of construction of infrastructure-related items during the second quarter of 2013.
- The widening of Silver Queen Road with turning lanes was completed on May 3. The turning lanes were extended with a "dip crossing" across a floodplain.
- A number of access roads and haul roads were constructed and this included the north-south access road, the interconnecting roads and the main haul road to the East waste rock storage pad
- Drilling and blasting was also required in a few areas and was successfully completed in December 2013.
- The pad where the workshop-warehouse will be constructed was excavated.
- The first phase of the site drainage system was completed in December 2013.
- The overland conveyor route was constructed and this is a key part of the infrastructure related to the construction of the Phase 1 heap leach pad.
- The site was fenced.
- A test was conducted with lignin sulfonate as a dust control agent and this appears to be a cost-effective agent for future use.
- Detailed engineering for construction of the key facilities for the Project continued and this was required to obtain final cost estimates for construction.
- We awarded several key contracts for key turn-key projects in the fourth quarter of 2013.
- We purchased an administrative office in downtown Mojave in July that has quickly become a hub of activity both for the Company's administrative staff and for the Mojave community at large.
- The Company maintained an active community outreach program in 2013.
Management and Board
The Company strengthened its management team in 2013 with the appointment of Laurence Morris as Chief Operating Officer in April and Andrée St-Germain as Vice President Finance and Chief Financial Officer in September.
Bryan A. Coates, Bernard Guarnera and Guy Le Bel joined our Board in June 2013.
Financial Highlights
The Company had net income of $2.0 million ($0.02 per share) in 2013 whereas in 2012, the Company had a net loss of $1.3 million ($0.01 per share). The net income in 2013 was largely the result of a $5.4 million reduction in the fair value of derivative liabilities. The Company had $15.8 million in assets, including $5.0 million in cash, and a working capital balance of $3.6 million as at December 31, 2013compared with $6.6 million in assets, including $4.0 million in cash, and a working capital balance of $4.0 million as at December 31, 2012.
The Company incurred significantly higher general administrative expenses in 2013 due to an increase in corporate activities both at the Company's head office and on site as the Company continues to prepare the site for production.
The Company incurred development costs of $8.1 million in 2013 as compared to development costs of $1.8 million in 2012. Construction costs included $2.7 million in site development, $1.6 million in infrastructure, $1.0 million for road construction, $0.7 million to excavate the pad where the workshop-warehouse will be constructed and $0.6 million for the construction of the overland conveyor route. The Company also spent $1.4 million to acquire property interests.
Shareholders are reminded that the Company has no revenues as its gold and silver Project is not yet in production.
| Results for the year ended on: Item | Dec. 31, 2013 $ | Dec. 31, 2012 $ |
| Cash | 5,030,522 | 4,031,403 |
| Mineral Property Interests | 9,919,486 | 1,799,301 |
| Total assets | 15,791,743 | 6,567,069 |
| Working Capital | 3,585,305 | 3,974,943 |
| Total long term liabilities | 8,028,857 | 3,998,009 |
| Net income (loss) and comprehensive income (loss) | 1,978,014 | (1,270,988) |
| Basic income (loss) per share | 0.02 | (0.01) |
| Diluted income (loss) per share | (0.01) | (0.01) |
| Stockholders' equity | 6,240,932 | 2,413,780 |
Financial results discussed in this news release for the financial years ended December 31, 2012 and 2013 have been audited by the Company's independent accountants.
The Company's audited consolidated financial statements and management's discussion and analysis for fiscal 2013 will be available on the Company's website at www.goldenqueen.com and on SEDAR and EDGAR.
Financing Update
The Company secured a $10 million loan in January 2014 to continue the development work on site (please refer to our press release dated January 6, 2014 for further details). The Company is evaluating various financing options for the Project, including equity, debt, and other alternatives. The Company estimates that construction can be completed in approximately 15 months once project financing has been secured.
Construction Update
The Company awarded a contract for the construction of the workshop-warehouse and wash slab. A key milestone was reached when the prepared pad was formally handed over to the contractor in mid-January to start construction of the footings as shown in Photograph 1. This is the first of a number of important turn-key projects for the Project.
Photograph 1 - Workshop-warehouse foundation concrete pour
Our general contractor is preparing the site where the crushing-screening plant will be constructed as shown in Photograph 2. This project is scheduled to be completed in late-March.
Photograph 2 - Crushing plant build-up in progress - lower area
The fill material required for the above project is being sourced from the overflow or events pond, which is located just downstream of the Merrill-Crowe plant. An independent consulting engineer has just issued final construction drawings for the events pond and the excavation is therefore being done to a final design as shown in Photograph 3.
Photograph 3 - Events pond excavation
Petition Filed with the United States Fish and Wildlife Service
On January 31, 2014 the Center for Biological Diversity filed an emergency petition with the United States Fish and Wildlife Service (the "USFWS") asking the USFWS to list the Mojave Shoulderband snail as a threatened or endangered species. Citing a report published more than 80 years ago, the Petition claims that the snail exists in only three places, and that most of the snail habitat occurs on Soledad Mountain. The Company is working with its environmental and legal advisors to prepare a detailed and complete response to the Petition and expects to submit a response to the USFWS in late-March 2014.
About Golden Queen Mining Co. Ltd:
The Company is developing a gold-silver, open pit, heap leach operation on its fully-permitted Soledad Mountain property, located just outside the town of Mojave in Kern County in southern California. The Project will use conventional open pit mining methods and the cyanide heap leach and Merrill-Crowe processes to recover gold and silver from crushed, agglomerated ore.
Technical information in this news release was approved by H. Lutz Klingmann, President, and a Qualified Person as defined under NI 43-101.
Caution With Respect To Forward-looking Statements: The information in this news release includes certain "forward-looking statements". All statements in this news release, other than statements of historical fact, including, without limitation, plans for and intentions with respect to construction and other development activities on the Soledad Mountain Project, and future mining operations on the Project, are forward-looking statements. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from statements in this news release regarding our intentions include the uncertainties involving the availability of project financing in the debt and capital markets; risks of construction and mining such as accidents, equipment breakdowns, non-compliance with environmental and permit requirements, and other risks and uncertainties disclosed in the section entitled "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2013. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, should not to put undue reliance on forward-looking statements. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made.
SOURCE Golden Queen Mining Co. Ltd.
Image with caption: "Workshop-warehouse foundation concrete pour (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140317_C5651_PHOTO_EN_38040.jpg
Image with caption: "Crushing plant build-up in progress - lower area (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140317_C5651_PHOTO_EN_38041.jpg
Image with caption: "Events pond excavation (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140317_C5651_PHOTO_EN_38042.jpg
